With the huge changes to US Tax in 2017, it is no surprise that there are going to be a few changes on the upcoming US 2017 tax returns.
Your federal form 1040 (or requested extension) will be due by April 17th, 2018. Military personnel serving in a designated combat zone or contingency operation may be able to file later.
During 2016, the IRS released the 2017 Tax Rates. Just to mention a few of the changes you will see this tax year:
· Additional standard deduction amount for the aged or the blind is $1,250. The additional standard deduction amount is increased to $1,550 if the individual is also unmarried and not a surviving spouse.
· The standard deduction for a taxpayer who can be claimed as a dependent by another tax payer cannot exceed the great of (a)$1,050 or (b) $350 + dependent’s earned income.
· For those taxpayers who itemize their deduction, the Pease limitations, named after former Rep. Don Pease may cap or phase out certain deductions for high-income taxpayers.
The front page of a form 1040 for the 2017 tax year
Line 34 of the 2017 federal form 1040 now says ‘Reserved for future use.’ The IRS have anticipated that the now-expired tuition and fees deduction could be reinstated as part of last minute, retroactive extenders legislation.
Standard deductions and Personal Exemptions
The standard deductions and Personal Exemptions are still on your 1040 for 2017. However, they have been adjusted with inflation. The standard deduction does not double until the 2018 tax year, and the personal exemption amounts don’t disappear until the 2018 tax year.
The Schedule A for 2017 has had a number of changes, these include:
· The 7.5% floor for medical expenses is back. It’s called a ‘floor’ because you can only deduct expenses over the percentage of your adjusted gross income (AGI).
· The tuition and fees deduction, the deduction for mortgage insurance premiums expired in 2016, and isn’t available for the 2017 tax year. As a result, line 13 reads as ‘Reserved for Future Use’.
Itemized deductions still apply in 2017. Phase out begins when your adjusted gross income (AGI)is more than $261,500 for single taxpayers; $287,650 for taxpayers filing as head of household; $313,800 for married taxpayers filing jointly or qualifying widower.